I find the distinction difficult to understand. The way I interpret the OSM license, the data is really not freely available to use in a commercial context except as a base layer. If you use the OSM data in combination with any other data sources you have to publish both the resulting dataset and any processing steps or algorithms used to produce the dataset. So that means you cannot combine OSM data with any dataset which cannot be released, and it also means any innovation you develop in processing the data cannot be protected.

I can see why the license was chosen, clearly it's necessary to prevent Microsoft or Apple taking the data and closing it off for their use, but at the same time it seems to make most business models using the data unsustainable. It's a shame from a HN perspective, you'd hope open data would allow for the continual opportunity for the creation of startups to innovate on using the data, locking open competition in the same way that open software has done, but it doesn't seem to be working out that way. Most companies in the area seem to be creators and consumers of base layers, I don't see many doing anything with the geographical database.

Perhaps I'm misunderstanding the terms of the license.